Ma creates mutual health medical protection
BILLIONAIRE Jack Ma’s Ant Financial has done more than perhaps any company to disrupt China’s gargantuan banking and asset-management industries. Now it’s trying to re-imagine health insurance.
Ant’s Xiang Hu Bao, which means mutual protection, has attracted 50 million people since its October inception, or more than five times the population of New York City.
The product operates somewhat like a collective, in which members contribute evenly to payouts of as much as 300 000 yuan (R628 000) when a participant falls critically ill. It’s free to sign up, there are no premiums or upfront payments, and disputes about claims are adjudicated by volunteer members, according to a statement from the company.
In return for managing the process, Ant will take an 8 percent administrative fee out of every payout.
Ant, best known for the Paypal-like Alipay service that underpins Alibaba’s online shopping platform, is re-designing financial products from money market funds to consumer credit that have long been dominated by stateowned Chinese behemoths.
The company’s foray into health care comes at a time when the country is grappling with a rapidly ageing population, one of the more pressing long-term threats to the world’s second-largest economy.
Ant said it hopes to sign up 300 million Xiang Hu Bao users within two years, which would represent more than 20 percent of China’s population.
“Ant can reach out to millions of users at a pace that traditional insurers can’t,” said Steven Lam, a Hong Kong-based analyst at Bloomberg Intelligence.
“This was the actual insurance model hundreds of years ago. They’re going back to the basics.”
Ma’s company joins a raft of startups angling to disrupt old-school health insurance in China, including Tencent and Sinovation Ventures-backed Waterdrop.
Beijing-based Waterdrop crowd funds from 78 million users and paid out more than 95 million yuan to members in the four or so months ended October, according to its website.